[Federal Register Volume 61, Number 237 (Monday, December 9, 1996)]
[Notices]
[Pages 64934-64935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31149]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38013; File No. SR-OCC-96-17]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Source of Prices for Certain Government Securities
December 3, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 8, 1996, The
Options Clearing Corporation (``OCC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which items have been prepared
primarily by OCC. The Commission is publishing this notice to solicit
comments from interested persons on the proposed rule change.
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\1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change amends Section 3, Article VII of OCC's By-
laws and Rule 604 of OCC's Rules by replacing the Federal Reserve Bank
of New York (``NY FED'') and the Bank of Canada as OCC's source for
U.S. and Canadian Government securities prices with ``a source
designated by'' OCC.
II. Self Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, OCC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. OCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\2\
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\2\ The Commission has modified the text of the summaries
prepared by OCC.
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(A) Self Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to amend Section 3,
Article VIII of OCC's By-laws and OCC's Rule 604 to eliminate reference
to the NY FED and the Bank of Canada as the required sources for U.S.
and Canadian Government securities prices. The proposed rule change
will allow OCC to receive prices from a source designated by OCC.
Currently, Section 3 states that OCC will value U.S. Government
securities deposited as contributions to the clearing fund based on bid
prices supplied by the NY FED. Additionally, Rule 604 states that OCC
will value U.S. Government securities pledged as margin collateral
based on bid prices supplied by the NY FED. Section 3 and Rule 604 also
require OCC to establish prices for Canadian Government securities
based on prices provided by the Bank of Canada.
On October 15, 1996, the NY FED ceased disseminating composite
quotations for U.S. Government securities. The NY FED informed OCC that
the function of providing prices for U.S. Government securities would
be better performed by a commercial service. Prior to such date, OCC's
vendor for U.S. Government securities received its prices from the NY
FED. On October 15th, OCC's vendor started receiving U.S. Government
securities prices from GovPX, a leading independent provider of
financial data. GovPX is one of the most widely used sources of U.S.
Government securities prices. Their prices are based on bid and offer
quotations reported by five of the six interdealer brokers in U.S.
Government securities. OCC intends to continue using Gov PX as its
source for U.S. Government securities prices
In addition, Rule 604 currently allows OCC such discretion in the
case of other foreign government securities. This amendment would make
the language of Rule 604 consistent as it pertains to the source of
U.S., Canadian, and other countries government securities prices.
Furthermore, the proposed rule change would give OCC the flexibility to
use a vendor that supplies, in OCC's opinion, the most reliable prices
for U.S. and Canadian Government securities. Finally, the proposed rule
change would eliminate the necessity to file a proposed rule change
each time a specific named vendor ceases to supply price quotations.
OCC believes the proposed rule change is consistent with Section
17A of the Act and the rules and regulations thereunder because the
proposed rule change will promote the prompt and accurate clearance and
settlement of securities transactions.
(B) Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change would impose any
burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
Comments were not and are not intended to be solicited by OCC with
respect to the proposed rule change, and none were received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) \3\ of the Act and pursuant to Rule 19b-4(e)(3) \4\
promulgated thereunder because the proposal is concerned solely with
the administration of the self-regulatory organization. At any time
within sixty days of the filing of such rule change, the Commission may
summarily
[[Page 64935]]
abrogate such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
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\3\ 15 U.S.C. Sec. 78s(b)(3)(A)(iii) (1988).
\4\ 17 CFR 240.19b-4(e)(3) (1996).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing also will be available
for inspection and copying at the principal office of OCC. All
submissions should refer to File No. SR-OCC-96-17 and should be
submitted by December 30, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12) (1996).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-31149 Filed 12-6-96; 8:45 am]
BILLING CODE 8010-01-M
